Jerry Brown - Meg Whitman debate: All the topics during tonight's live coverage

Whitman said she and her husband moved to California 30 years ago as newlyweds, and said they lived "the California dream. ... Today, what I see is the California dream is broken. I want to bring that California dream alive."

Whitman said we have "a government we can no longer afford" and talked about "tough trade-offs."

Brown said "we do have to make some tough decisions, we have to live within our means." He said "we can't scapegoat" immigrants, public employees or other groups. "We must rise above the poisonous partisanship," he said. "We have to think as Californians first."

Brown disavowed the notion of California as a failed state as an "East Coast" idea. The debate is being moderated by NBC's Tom Brokaw.

Are voters unrealistic about government spending?

The second question from Tom Brokaw is about whether voters have become “utterly unrealistic” about what can be cut from government spending without affecting services.

Meg Whitman said “the voters of California have the right instinct” and that billions can be cut.

“We need to shrink the size of government,” she said, specifically naming public pensions, welfare and the need to “use technology to do more with less.”

Jerry Brown took a different tack, saying: “We’re all unrealistic when it comes to pain or sacrifice or hard choices.”

He said that, as governor, he would lead by example: "Those at the top should cut first."

"Proposition 13 is absolutely essential to the future of California and I want to defend Proposition 13," Meg Whitman said. "The really only sustainable way to create more tax revenues is to create more jobs."

Whitman said she would cut taxes and streamline regulations to create more tax revenue for the state.

Brown, who was governor when Proposition 13 was passed, also said he was in no hurry to change the law.

"There's no sacred cows over the long term. We have to look at things," Brown said. But he said he would abide by the existing law. "A lot of the problem of 13," Brown said, is that "the state took over more and more power. ... I would do my utmost to return authority and decision-making to the locals."

She repeated her familiar answer that she supports a one-year suspension of the law, but not the measure on the November ballot.

"AB 32 is going to do real damage to the 97% of the jobs in the rest of the economy," she said. "So, I called for a one-year moritorium on AB 32."

"We can be green and smart," she said, but we must be mindful of record-high unemployment. "What's wrong with taking a pause?" she asked.

Brown said Whitman was trying to have it both ways and that her proposal creates "regulatory uncertainty." He touted his plan to produce 20,000 megawatts of renewable energy in the state. "The people who are crying are two big oil companies in Texas and a petrochemical company in the Midwest," a reference to the funders of the Yes on 23 campaign.

Brown began by dismissing the recording, calling it a “5-week-old private conversation” before eventually offering a half-hearted apology to Whitman for the “garbled transmission.”

She didn’t accept it. “It’s not just me but the people of Califonria who deserve better than slurs,” Whitman said.

The remark, she said, was “not befitting of the office you are running for.”

Brown began to defend the recording again, saying he was “not even sure it’s legal,” suggesting the campaign had not consented to being recorded. Brown’s former communications director, in his attorney general’s office, resigned after secretly recording interviews with reporters.

Whitman's wealth and voting record

Moderator Tom Brokaw has asked Meg Whitman why she is using her fortune -- $120 million and counting – to run for governor when she didn’t vote for most of her life.

“I am not proud of my voting record,” Whitman said, as she repeatedly has stated on the campaign trail.

Whitman said she will come to Sacramento “with no strings attached” to special interests, if elected governor.

She accused Jerry Brown of being in the pocket of the state’s public employee unions.

Brown said he has stood up to unions, both as mayor of Oakland and during his previous time as governor.

"If you couldn't find someone in your home was undocumented or illegal, how do you expect businesses to do it?" asked moderator Tom Brokaw.

Whitman called for an "e-verify system" to make sure the documents presented by immigrants are valid. She said she wants to give more resources to secure the nation's border and restart a guest-worker program. She also talked about her opposition to Arizona's controversial immigration law.

Jerry Brown said it was a federal responsibility and that asking local police officers to raid businesses was a waste of time.

"The biggest problem here is we have millions of people who are here illegally. They're in the shadows," Brown said, calling for comprehensive federal immigration reform that includes a path to citizenship for workers who are in the country illegally but otherwise play by the rules.

Brown said Whitman's firing of Nicandra Diaz Santillan was "kind of a sorry tale," noting that "after nine years, she didn't even get her a lawyer."

Meg Whitman said Jerry Brown "needs to defend that lawsuit," to try to uphold the state's gay marriage ban.

Brown said "I'm following the precedent of a prior attorney general," and said he believes Proposition 8 violates the 14th Amendment of the U.S. Constitution. Brown called Proposition 8 "so fundamentally wrong."